Chinese Crypto Billionaire's Firm To Buy Crypto From Troubled Miners At A Discount

KEY POINTS

Bitdeer will invest in a $250 million fund meant to buy assets from the miners
It will reportedly invest $50 million as part of a junior tranche
The firm will raise the remaining $200 million from outside investors

Chinese crypto billionaire Jihan Wu's Bitdeer Technologies Holding Co. is taking the lead in investing in a $250 million fund meant to buy crypto assets from troubled Bitcoin miners. This comes after the significant crash of the world's leading cryptocurrency in the past few months.

The firm will invest $50 million as part of a junior tranche, Bloomberg reported Monday. It means that in the case the fund loses money, Bitdeer's investment will be first at risk. Bitdeer will raise the remaining $200 million from outside investors like family offices, venture capital firms, alternative investment funds and other mining companies.

"There are opportunities in every cycle," Matt Kong, Bitdeer's chief executive officer (CEO), said, as per the outlet. "If you can time the market and enter at the bottom, come out at the top, then you will make money. It works especially well for mining."

Bitcoin miners have been under a lot of stress lately due to the crashing prices of cryptocurrencies, the increasing competition and the regulatory pressure pushing for a complete ban on such activities. The worsening conditions led to a two-year low in revenue for crypto miners, according to the outlet.

"We can buy the cheaper machines and run them in our existing facilities with stable and cost-effective power purchase agreements," Kong said. "You'll have the cash flow."

Compute North, one of the most prominent Bitcoin miners, recently filed for bankruptcy and revealed that its CEO had officially stepped down, CoinDesk reported.

"The Company has initiated voluntary Chapter 11 proceedings to provide the company with the opportunity to stabilize its business and implement a comprehensive restructuring process that will enable us to continue servicing our customers and partners and make the necessary investments to achieve our strategic objectives," a spokesperson from Compute North told the outlet.

Atlas, a major Application-Specific Integrated Circuit (ASIC) mining firm, partnered with Compute North last year due to increasing demand for mining rigs.